Monday, July 23, 2012


Above is the summary of all the trades in the Bond System since I went public with it here in this Blog, from April of this year forward. Obviously these results are very good and I have to make sure to make this as clear as it can be made, this cannot in any way be assumed that the performance will be the same as this in the future. I guarantee it will not be the same. It could be better or worse, but it will not be the same. I am rolling this out to those who have expressed interest to me, and I will be sending you an email with more details. Basically it is going to be $60 per month paid in advance, and needs to be received by me no later than the 30th of the month preceding the subscription period. This along with all the details about how to use this, how to place the trades, where to exit, etc.. will all be in a PDF you will receive once I get your initial payment. I will also have a cell number in there so you can call me with questions.

Here are the ground rules for calls on this. First, I am always happy to talk to people about the markets at any time. It is my life's interest, I love to talk to all levels of people about things relevant to trading. What I don't want to get into is conversations about whether I think a particular trade will work and why? This is a systematic approach to trading. It is rules based, when the rules say to do something you do it. It is really that simple. You just follow the rules. None of us myself included, have any idea when a trade will work or won't. Often times I look at trades this has generated and think they are terrible, and would not want to do them, then watch them go on to make a big profit. At other times the ones I think are great, take a loss. So it is with the world of trading any style, this is not mutually exclusive to systems trading.

I also don't want to commiserate on losses. I am going to be doing these trades also, so I will also be losing when losses occur. This system has been on such a good run, it is inevitable some losses are going to show up here. However, we never know when they will occur. I can assure you that if you just arbitrarily start cherry picking these, you will under perform the system. You may get lucky once and dodge a bad one, but that reinforces bad behavior unfortunately. I would suggest doing them all. Whether or not you combine these with something else you are already doing or not, the responsibility falls on you. What you will get are trades to make. What you do with them, how you manage them will be up to you. The rules have everything covered, there are no judgement calls you need to make. If you make them, that is on you.

There are not going to be any refunds. This is month to month, if you don't like it just don't send in the next month's check on time, and you will be off the list. It is only $60 a month, so it is not as if you are committing hundreds or thousands of dollars to something. The commitment is $60 basically. I should sell this for more in all honesty, but it is time to get this started and see where it goes. Assuming it holds up, I will likely raise the price to newcomers down the road. You will be grandfathered in as an initial subscriber, so you will be guaranteed that rate as long as you stay in the program. If you leave and come back, you will have to pay the going rate if it happens to be higher at the time you come back.

The orders are going to come through emails to you. An email will go out within the next day to those of you who have expressed interest, so look for that. 

There are not really any updates on the PFG situation. The one good piece of news is that you will be able to write off the whole amount of your loss due to this fraud against your income and can possibly carry it backward if it exceeds your income, or forward. That is a new accounting rule called the Madoff rule I believe. It does appear the company had about $25 Million in cash when it went down. The guy has a jet worth $7 to $10 Million, a few condos worth a Million and another house worth a million. He also has a wine collection worth about 100k. What other assets exist and where they are, who knows. There is word that a petition was served to the NFA and CFTC demanding they reimburse the victims for this, I have no idea if that is true or not, or whether there are any legal merits to it. I have determined that lawsuits against the NFA are a real challenge. This whole thing is setup for there to be no recourse for victims in these situations. There is no sense throwing good money after bad here.

I am launching a Blog to on a daily basis attack some of these problems in hopes that we can effect some change. You will see a link to it here once it is ready to go. I like the name I came up with, I hope my readers do as well.

Back to the markets. we are in a challenging spot here. We have several markets that have really run up here, enough to make them tough sells because we are on the verge of trend changes in them. Yet chasing them here is not a good idea. Here is one market I talked about recently and a trading lesson on it.

What you can see from this is that it is very important to identify the correct trend break areas, especially when trading reversals. There is no question Bean Oil has been the weakest grain, the chart looks completely different than the other grains. It is always tempting to just go in below a prior bars low, to keep stops small. When that break turns into a big day, it is always great because then your risk winds up being very small. However, the flip side to that is that entering in these little wobbles, often gets you chopped up with a bunch of small losses. It depends on your emotional makeup as to whether you can handle losing a lot trying to catch the big ones. Personally, this wears on me when I have a bunch of losses even if they are small. I remember the recent trading service I told readers I signed up for,  it had 18 out of 20 trades lose at one point. The losses were small, but that was so disheartening, it just wore on me as I think it would on most people.

In this case to me even though we have a break of the prior low that went a ways, I really see this whole market as being in a sideways or ledge type of situation, which is basically right at the highs of the last couple of months. This is not really a sell pattern in my opinion, no matter what fancy lines I can draw in here. I would prefer to see a break down of the ledge, then a rally back to the bottom of it or slightly above that level. At that point I would want to short this market. I hope that makes sense. It is a judgement call of course.

I have the two possible ways of trading this on the short side labeled and the one I would prefer. It is true, if this just does fall out of bed, the more conservative entry won't set up and I will miss it. However, I think when trading against a trend and looking for a reversal, you need to be sure where you enter is a trend change and not a wiggle.

That is it for today


Chris Johnston said...

I saw a comment that has not shown up for some reason even though I let it through asking about Interactive Brokers and Trade Station for stocks. I had a very bad experience with Interactive Brokers so I will never use them again. As to Trade Station for stocks, SIPC covers stock balances up to 100k of cash and I think 250k or 500k of actual stock holdings. I would suggest not ever in your life having more in one place than that after what we are seeing now. Have it only where it is backed by a government PERIOD.

John M said...

Thanks for the advice, Chris, this is good to know.